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Abstract
This study examined the use and impact of mobile money and microfinance services to determine the factors that influence their use, and to identify their separate and complementary impact on financial inclusion in Ghana. Qualitative data collected through interviews with service providers, agents, and focus groups were used to draw parallels and contrasts between provider and consumer perspectives on impacts and challenges of the systems. A survey sample of 280 respondents was also used in a series of logistic regression analysis to determine the indicators of the using mobile money for payments, remittance, and saving, and microfinance for borrowing, saving, and investing. The results showed that regulation, network and system failures, fraud and security concerns, and consumer behavior were the major environmental challenges to the growth and sustainability of mobile money and microfinance. While regulatory challenges were the primary concerns from provider perspectives, network capacity and consumer lack of awareness and understanding of the system were recognized as major challenges by both service providers and consumers. Socioeconomic factors such as age, education, and income as well as consumer perceptions about usefulness, ease of use, and security of the systems were found to be important indicators of usage behavior. The overall conclusion of the study is that mobile money and microfinance are both facilitating access to alternative financial services and the overall goal of financial inclusion. The specific use options may appeal to different segments of the population but mobile money is mainly driven by its usefulness and microfinance by its ease of use. However, there are eminent challenges relating to regulation, network and system failures, as well as security and fraud that need to be addressed.